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Identifies an error in the measurement of private rates of return to aggregate levels of education. When education is viewed as a continuous variable, the estimated rate of return is to an incremental year of schooling. However, rates of return are often estimated for aggregate levels of education such as the secondary and university levels. When an aggregate level has sub‐levels, such as bachelors′ and masters′ for the university level, the conventional procedure underestimates the rate of return to the aggregate level due to the dominance of up‐front costs in the discounting procedure used to compute rates of return.

This study evaluates the economic effectiveness of higher education in Lithuania by measuring returns to investment in higher education for both individual university graduates and the state, particularly aiming to discover how higher education investments impact economic returns at both micro (individual) and macro (national) levels.

A dual methodological approach has been applied, utilizing both the Mincer earnings equation and the full discounting method, to draw a clear distinction between the returns enjoyed by individuals and those accrued to the country. Calculations for individual economic returns are done using the most recent available Lithuanian Department of Statistics data on the wage structure, while national return on education was based on the State Tax Inspectorate and Lithuanian Public Finance databases.

The research confirms that Lithuanian investments in education positively influence both individual earnings and society at large, mainly due to the low cost of education and the high returns. For individuals, net present value varies from €126,000 to €224,000, and the internal rate of return is from 7% to 46%, with the highest return being for males working in companies of 50–249 employees and holding a bachelor’s degree. It is also noteworthy that one additional year spent in education increases earnings on average by 4.1%. The financing of first cycle studies costs the state two times less than second and third cycle studies. For this reason, the net present value (NPV) and internal rate of return (IRR) of first cycle studies are higher than those of second and third cycle studies.

While higher education is generally and globally seen as a way to ensure financial stability and career advancement at the individual level and socioeconomic development at the national one, the question of cost versus benefits at both levels is principal and diachronic. Our research quantifies the NPV and IRR of education investments and highlights the differential economic returns of various education levels, where policymakers can utilize these insights to inform strategic decisions regarding education funding and resource allocation. This study, therefore, provides explicit quantitative answers and presents individuals and policymakers with tangible results and practicable direction in their decision-making. The findings are applicable to the specific country-focus, but also constitute an applicable case study in the international context, particularly for European and other countries of comparable economic structure and developmental stage.

This work examines the returns to education for workers who pursue additional education after time out of the labor force. It compares those who remain in the labor force during additional education with those who drop out of the labor force during additional education. It compares two cohorts of the National Longitudinal Survey of Youth (NLSY).

This work utilizes a difference equation to estimate the returns to education for workers who pursue additional education after time spent out of school and in the labor force.

The results indicate a sheepskin return of approximately 14% for those who remain in the labor force and a return of approximately 9% to years of additional education for those who drop out of the labor force. This contrasting pattern of returns is robust to sample selection correction and a variety of checks.

This work does not fully account for all threats to causation. Further research could pursue these and make use of data from more clearly defined periods of education.

This work finds key differences between the internal labor market faced by those remaining in the labor force and the external labor market faced by those dropping out of the labor force. A policy focused on re-training workers should account for these differences.

This is the first work to compare workers who pursue additional education while remaining in the labor force to workers who pursue additional education and drop out of the labor force.

Young people experience lower employment, income and participation rates, as well as higher unemployment, compared to adults. Theory predicts that people respond to labor market information. For more than 50 years, researchers have reported on the patterns of estimated returns to schooling across economies, but the estimates are usually based on compilations of studies that may not be strictly comparable. The authors create a dataset of comparable estimates of the returns to education.

The data set on private returns to education includes estimates for 142 economies from 1970 to 2014 using 853 harmonized household surveys. This effort holds the constant definition of the dependent variable, the set of controls, sample definition and the estimation method for all surveys.

The authors estimate an average private rate of return to schooling of 10%. This provides a reasonable estimate of the returns to education and should be useful for a variety of empirical work, including critical information for youth.

This is the first attempt to bring together surveys from so many countries to create a global data set on the returns to education.

The purpose of this paper is to study the gender specific private returns on education (RE) in Europe in a comparative perspective. The authors extend the model of de la Fuente (2003) by estimating the parameters by gender and introducing maternity leaves and benefits. The paper analyses the impact of the public policy variables evaluating the elasticities with respect to unemployment benefits, marginal and average tax rates, maternity leave and childcare benefits.

The authors estimate the Mincerian coefficients, with the Heckman’ selection model, for 12 West European countries using the EU-SILC data. The authors then use them as input to calibrate the decision model.

The RE of females tend to be higher than those of males in all the Europeans countries but Germany, the Netherlands and Sweden. The gender gap can be explained mainly by the wage premia and labour income taxes which more than compensate the negative effects on females’ returns triggered by higher unemployment rates and maternity-related benefits.

The tax system has the most pronounced effect on RE. An increase in the marginal tax rates has a negative impact. An increase in the average tax rates can have a negative or positive impact, depending on the progressivity of the tax system. An increase in unemployment benefits and maternity or child-care benefits has a negative but fairly small impact.

The analysis considers just one dimension of maternity related policies: the effect on RE and differences across gender. These policies may have aims which are beyond the scope of this paper, for instance to increase fertility. From this viewpoint, the small values of the elasticities presented are reassuring in that they suggest that they can be implemented at a fairly small cost in terms of investment in human capital.

The authors compute the RE using a model which allows us to take into account and assess the significance of relevant variables: wage premium, income tax, some public transfers and benefits, costs of the investments. Moreover, the authors estimate the wage premia using relatively recent EU-SILC data. Finally, the paper compares 12 EU countries spanning quite different labour market conditions and institutions.

The purpose of this paper is to examine the role of education in the labor market and to understand how returns to education change over time in rural China.

Using nationally representative survey data from 2004 to 2015, this study provides insights on wage determination in the labor market and examines how the returns to education in rural China differ with time and educational endowment. This study applies ordinary least squares estimation and the Heckman selection model to estimate the returns to education.

The returns to education decreased during the observed years from more than 6 percent in 2004 to only about 3 percent in 2011, rising to nearly 4 percent in 2015. The overall trend is robust and observed within groups defined by education. Additionally, the returns to education vary greatly with educational endowment. Tertiary education has always maintained a high rate of returns at nearly 10 percent, while returns to senior high school education and below have gradually diminished.

The authors believe that the results will not only enrich studies on the returns to education in rural China, but also provide a basis for diagnosing the changes of rural labor market in the early twenty-first century.

This study investigates the role of race, family background and education in earnings inequality between whites and the African descendent population in Brazil. It uses quantile Mincer earnings regressions to go beyond the usual decomposition of average earnings gaps. Differences in human capital, including parental education and education quality, and in its returns, account for most but not all of the racial earnings gaps. There appears to be greater pay discrimination at the higher salary jobs for any skill level. Returns to education vary with the gradient of skin color. While returns are similar for white and mixed race workers at the top of the adjusted wage scale, mixed race workers at the bottom are rewarded similar to blacks. Thus, while equalizing access to quality education is key to reduce racial earnings inequality in Brazil, specific policies are also needed to facilitate equal access of non‐whites to good quality jobs.

The main purpose of this paper is to investigate the sheepskin effects in the returns to education in the Sri Lankan labor market by ethnicity.

The study is based on the latest Sri Lankan Consumer Finance and Socio‐economic Survey. The study employs the quantile regression method for each conditional quantile wage group, rather than the mean regression analysis used in most labor market analysis. The quantile regression technique fits hyperplanes through out the conditional wage and is ideal for characterizing the entire wage distribution. The standard Mincerian wage equation was estimated for the full sample of male workers and separately for the two main ethnic groups in Sri Lanka.

The empirical findings are broadly encouraging. Quantile regression results suggest that average returns to education for both ethnic groups differs significantly from the returns at the two extreme ends of the wage distribution. In general, the returns to education are positive for both groups, but the returns are higher for Sinhalese workers than for Tamil. An increasing trend in returns to education is evident for both ethnic groups when moving up wage distribution. Sinhalese workers experience higher returns to education than for Tamil especially at the bottom of the wage distribution, but the difference becomes less at the upper part of the distribution. Estimated results with spline in years of education suggest that returns to secondary education are higher for Sinhalese workers, but the returns to tertiary education are greater for Tamil workers at the upper part of the wage distribution. Findings indicate that returns to experience are also higher for Sinhalese workers than for Tamil workers.

This is the first study that examines sheepskin effects in the returns to education by ethnicity in Sri Lanka in a Mincerian framework, employing quantile regression models.

The increasing rate at which individuals, especially, females in Ghana are seeking higher education calls for an estimation of the returns to schooling and education in Ghana.

The study employs the Mincer equation to a representative cross-sectional micro-data from Ghana using OLS and instrumental variable (IV) methodologies. The paper uses spouse's education as instruments in the IV estimation.

Return to schooling was found to be higher for females than males, likewise, membership of an old student associations and location of the household. Returns to education increases as the level of education rises whilst the rate of returns initially increases but fall as labour market experience rises. The study also found that the rates of return to education were higher for Christian, followed by Muslim and believers of other lesser-known religion in Ghana.

Return to schooling was found to be higher for females than males. Likewise, individuals who are members of an old student association and are in urban areas were found to have a higher return to schooling than individuals who are not members of an old student association and are in rural areas. Returns to education increases as the level of education rises whilst the rate of returns initially increases but fall as labour market experience rises. The study also found that the rates of return to education were higher for Christian, followed by Muslim and believers of other lesser-known religion in Ghana.

Wage determination process is different for males and females, across religion and residency. The higher returns to schooling for females imply education is a good investment for women and girls and should be a development priority.

The higher returns to schooling for females imply an investment in girl's education should be a development priority.

The paper extends the existing literature by focussing on the role of religion, old student's association (alma mater) and gender on the differential earning returns to schooling.